Pentagon's cost savings proposals lost to compromise of authorization bill

Jared Serbu reports.

Leaders of the House and Senate Armed Services committees reached a compromise on the annual
DoD authorization bill this week. And while staff members still are working to
turn that compromise into actual legislative language, it's already clear that the
deal will reject several of the Defense Department's more controversial
suggestions for saving money.

It's become an annual exercise over the last several years. The Pentagon asks for
permission to rein in its spending on infrastructure by conducting a new round of
base realignments and closures (BRAC), and to cut back on personnel spending by
shifting some health care costs to working-age military retirees. Congress then
makes its strong disapproval known in committee hearings and shoots down the ideas
in the annual Defense authorization bill.

Whether lawmakers can pass the annual policy bill in the few legislative days
remaining this year still is an open question, but the last-ditch compromise
Republican and Democratic leaders reached this week prohibits another round of
BRAC and forbids DoD from raising retiree premiums in the TRICARE health insurance
system.

While those decisions may not be surprising, they are disappointing," said Ray
Mabus, the secretary of the Navy.

"This is huge," he said. "We're going toward having a very small, very well-paid
and very poorly-equipped force. That's where we're heading, because personnel
costs are eating up a bigger and bigger part of the budget."

For TRICARE, DoD's 2014 budget proposed a means-tested system of higher premiums
for retirees. They would be capped at $750 a year for most retirees and $900 per
year for retired generals and admirals. The fee would gradually rise before
reaching 4 percent of an individual's retirement pay by 2017.

Currently, retirees pay $548 per year to cover an entire family.

"We are at the point where we're going to have to decide whether we're going to
provide an incredibly good deal for retirees, or whether we're going to give the
active duty military the tools they need to do their jobs," Mabus said Tuesday at
a defense conference in Washington hosted by the U.S. Naval Institute. "That's the
equation. You can't do both. We have to continue to push on this. You can keep
doing things the way we're doing them, but you're going to get a smaller and
smaller force that's less well equipped."

Small pay raise for the military

DoD leaders also argue that BRAC is central to their efforts to reduce personnel
spending, particularly on the civilian side.

The military services say they are expending manpower unnecessarily to operate and
maintain base infrastructure that they no longer want or need.

The compromise fiscal 2014 National Defense Authorization Act (NDAA) will
incorporate DoD's request for a 1 percent pay raise for military members —
a lower level than many members of Congress would have liked.

But a fact sheet released by the Armed Services committee leaders, who reached the
agreement, reveals few other details about how the measure would handle personnel
spending.

In any case, it's far from a done deal that the bill will clear Congress.

The deal only became necessary after the regular debate process over the
authorization act broke down in the Senate. The House passed its version of the
bill months ago.

Staff members are working to get the agreement ready for formal introduction onto
the House floor, where it would need to pass by majority vote by the end of this
week, because that chamber is leaving town for the rest of the year.

The Senate will be in session next week. It could continue to work as long as
senators don't make any changes that would require the House to agree. If that
game plan doesn't work, it would be the first time in 52 years that Congress has
failed to pass a Defense authorization bill by the end of the year.

Sen. James Inhofe (R-Okla.), the ranking member of the Armed Services Committee,
acknowledges the situation is less than ideal.

"This isn't the way we'd like to do it, but we got to the point, a week ago today,
when this is the only way that we could do it," Inhofe said. "But I think it's
important that we actually considered 87 amendments that have been brought up, and
we passed 79 of them. You know, that's kind of hard to do. It would have been
harder to do on the floor. The choices are not, do you want to have an NDAA bill
the way we're doing it here or have one the normal way it takes place, because
that's not possible any longer."